College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Question
Chapter 7A, Problem 4SPB
1.
To determine
Suggest a control to prevent it from happening for the misstatement, if a bill from a supplier was paid for goods that had not been ordered.
2.
To determine
Suggest a control to prevent it from happening for the misstatement, if a supplier’s bill for 50 boxes of materials was paid even through only 40 boxes were received.
3.
To determine
Suggest a control to prevent it from happening for the misstatement, if a expensive product components were stolen by an employee from a loading dock area after hours.
4.
To determine
Suggest a control to prevent it from happening for the misstatement, if no bill was sent to a customer for a shipment because the shipping document was lost after the shipment was made.
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Students have asked these similar questions
What internal control procedure(s) would provide protection against the following threats?
a. Theft of goods by the shipping dock workers, who claim that the inventory shortages reflect errors in the inventory records.b. Posting the sales amount to the wrong customer account because a customer account number was incorrectly keyed into the system
.c. Making a credit sale to a customer who is already four months behind in making payments on his account.
d. Authorizing a credit memo for a sales return when the goods were never actually returned.
e. Writing off a customer’s accounts receivable balance as uncollectible to conceal the theft of subsequent cash payments from that customer.
f. Billing customers for the quantity ordered when the quantity shipped was actually less due to back ordering of some items
.g. Lost sales because of stockouts of several products for which the computer records indicated there was adequate quantity on hand.
h. A sales clerk sold a $7,000 wide-screen TV…
The company XYZ suffers from numerous weaknesses in its internal control system. For each the below situations, you are required to identify the anomaly/risk related to this system and propose eventual solutions.
The financial department issues one copy of the sales bill that is shipped to the customer with the company
The inventory custodian is the person who deliver the merchandise to the
The person who keep the checks (issued and received) is the same who have access to the company accounting system.
A has now 9 years experience in the company. He is responsible to keep cash and checks. Since he joining XYZ , he has not claim any vacation.
The financial manager prepares the checks for the company suppliers and receive the merchandises ordered by the
The company XYZ has recently installed an ERP system to manage all its activities . Different staff have access to this system.
Mr X is working…
If reconciliation as a control is properly implemented at Company, Inc. it would detect all of the following errors, except;
A) Transactions at Company, Inc. were appropriately posted to individual subsidiary accounts but because of a computer malfunction, some of the transactions were not posted to the master account
B) Company, Inc. has experienced inventory shrinkage (theft) that has caused the perpetual inventory records to be overstated
C) Three shipments at Company, Inc were never invoiced because employees in the shipping room colluded with a shipper to deliver the goods to their own private companies for resale and they never recorded the shipments on any documents
Chapter 7A Solutions
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
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- Paragon Tech Company, a communications equipment manufacturer, recently fell victim to a fraud scheme developed by one of its employees. To understand the scheme, it is necessary to review Paragon Tech’s procedures for the purchase of services. The purchasing agent is responsible for ordering services (such as repairs to a photocopy machine or office cleaning) after receiving a service requisition from an authorizedmanager. However, because no tangible goods are delivered, a receiving report is not prepared. When the Accounting Department receives an invoice billing Paragon Tech for a service call, the accounts payable clerk calls the manager who requested the service in order to verify that it was performed.The fraud scheme involves Mae Jansma, the manager of plant and facilities. Mae arranged for her uncle’s company, Radiate Systems, to be placed on Paragon Tech’s approved vendor list. Mae did not disclose the family relationship. On several occasions, Mae would submit a requisition…arrow_forwardWhich of the following is an example of poor internal control in an organization?a. The company rotates employees through various jobs.b. The accounting department compares goods received with the related purchase order.c. The mailroom clerk records daily cash receipts in the journal.d. Employees must take vacations.arrow_forwardWhich situation indicates a weak internal control structure?a. the AR clerk authorizes the write off of bad debtsb. the record-keeping clerk maintains both AR and AP subsidiary ledgersc. the inventory control clerk authorizes inventory purchasesd. the AR clerk prepares customer statements every montharrow_forward
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